Seanad Éireann díospóireacht -
Wednesday, 10 Nov 1993

Vol. 138 No. 3

Irish Aviation Authority Bill, 1993: Committee Stage.

Section 1 agreed to.

SECTION 2.

Question proposed: "That section 2 stand part of the Bill."

Mr. Howard

I have a few questions on this section. My first question may appear frivolous but it is not in reality. This Bill intreprets and defines what words mean and in page 7, "aircraft" is defined as "a machine that can derive support in the atmosphere from the reactions of the air,"— I can understand that part of it, but "other than the reactions of the air against the earth's surface" created some problems me. I want to make a few points on this matter and as I said, I am not being frivolous.

Over the weekend, we read of a certain event in the United States where a certain Mr. Miller was, according to witnesses, circulating around 800 feet above the ground and would have succeeded in landing, were it not for some lighting cables, in the middle of a boxing ring. There was a fair element of accuracy in that. I do not know if the Minister knows — I have no knowledge of it myself — what kind of a contraption Mr. Miller was operating but if this machine derived its support in the atmosphere from the reactions of the air, it is covered under the Bill, but if it derived its support from the reactions of the air against the earth's surface, it is not included.

I am expected, like every other Member, to assent to the contents of this Bill and I want to be satisfied that I know what is the definition applied to an aircraft, especially with regard to the latter part of the definition —"other than the reactions of the air against the earth's surface". What is the Minister talking about here?

Minister of State at the Department of Transport, Energy and Communications (Mr. N. Treacy)

I am interested in the points made by Senator Howard. He has given the definition of aircraft in the Bill himself. The vehicles included in that are power driven aircraft, aeroplanes and helicopters, non-power driven aircraft, balloons, gliders and hangliders. When we refer to reactions of the air against the earth's surface — the surface of the earth includes land and water — we are referring to a machine similar to a hovercraft which reacts on the surface of the water and moves without going into the air. The Bill excludes such machines.

Mr. Howard

A hovercraft only?

Mr. N. Treacy

That is correct.

Mr. Howard

I accept what the Minister said. I want to move on to the subject of the authorised officer. There are four categories defined in the Bill. I want the Minister to explain what function or role he envisages, for example, for an officer of the Permanent Defence Forces and an officer of Customs and Excise? I can understand that there is a role for an officer of the Minister or a member of the staff of the company, but what role is envisaged for the Commissioner of Public Works? I am sure the Minister understands my interest in this given the area I come from.

Mr. N. Treacy

Senator Howard asked about the role envisaged for an officer of the Customs and Excise and an officer of the Permanent Defence Forces. When introducing legislation, we must take into account existing legislation and the effect new legislation might have in impinging on the operation of existing legislation and laws of the State. The purpose of including these officers is that in this situation these definitions will enable the company to authorise those people to act as authorised officers of the company for any period of time, including an officer of the Permanent Defence Forces holding a commissioned rank from lieutenant upwards, an officer of the Minister, an officer of the Customs and Excise or a member of staff of the company. It could relate to drugs, the security of the State, a disaster, etc., in other words, the Authority would have the power to delegate functions of responsibility to appointed officers from other State Departments or agencies to carry out functions on behalf of the authority in the interests of the nation.

Mr. Howard

Section 2 is long. In the Bill "State aerodromes" means Cork Airport, Dublin Airport and Shannon Airport and "State aerodromes" shall be construed accordingly. I have been unable to find a definition of unlicensed aerodromes, although there is a definition of State aerodromes. Are all aerodromes and landing strips, private or otherwise, regional airports, etc., excluded from the classification of State aerodromes? If so, is it not extraordinary that no section or no part of section 2 defines other aerodromes, particularly regional airports, and landing strips and private airfields? What is the position of the categories I mentioned, particularly unlicensed aerodromes because as I said, State aerodromes have been defined as Dublin, Cork and Shannon Airports? Are all aerodromes other than Dublin, Cork and Shannon Airports unlicensed aerodromes under the terms of this legislation?

Mr. N. Treacy

The word "aerodrome" is used in the Bill in the normal sense of a landing field. References to aerodromes also cover areas of water used for landing seaplanes, helicopter landing areas known as helipads and landing areas on oil rigs and other structures. This clause does not define the term but extends its normal meaning. All State airports and regional airports are licensed by ANSO and they must operate in accordance with stringent international and national regulations. The airport in Baldonnel will be under military law, so that is covered in its own right there. However, there would be other private landing strips and similar places that normally would not have a licence because they would be operating in the lower air space at all times and, consequently, would not be used in a regular way. Some people would have their own private planes and landing strips and would not normally be licensed because they would be for private use. I hope that is of assistance to the Senator.

Mr. Howard

The Minister spoke about seaplanes and regional airports. Where in the Bill are these categories of airport mentioned? We refer to three State aerodromes. I have no objection to the reply the Minister gave in responding to my question but my objection is that it does not appear to have effect within the Bill.

Mr. N. Treacy

That is a matter of interpretation. "Aerodrome" is included in the Bill, and covers the definitions I have given. There is a link between section 60 (1) (b) (i) and section 2 (1). Basically, our definition of "aerodrome" covers the various expanded definitions I have given, and, consequently, the Bill covers them.

Mr. Howard

The Minister is suggesting that we wait until we get to section 60 to find——

Mr. N. Treacy

If I could again be of assistance, section 60 (b) (i) states:

for the licensing and regulation of aerodromes (other than State aerodromes), and for the regulation of aeronautical safety standards at State aerodromes.

In other words, we are saying that the Authority would have the power to decide if it is necessary to put in a regulation, or to demand that a licence be sought for a particular landing area, when we are talking about air navigation in that area. This is the facility we are giving to the Authority and they would operate in the interest of public safety and the safety of aircraft at all times. It is a wide definition to cover any eventuality in the interests of public safety but, more particularly, public aviation safety.

Mr. Daly

If my understanding is correct, what is being proposed in this legislation is broadly putting in place a reenactment of the existing situation. To that extent the points made by Senator Howard, while relevant, are covered. My understanding is that any airfield, for example, the small airfield in Miltown Malbay/Spanish Point where there was a tragedy this summer — even though it may not be defined in the national sense like the transatlantic airport at Shannon — would, nevertheless, have come under the control of the Department heretofore and will now be under the new Authority.

Such airfields would have to operate under the same guidelines and safety standards required for larger airports. The situation seems to be, more or less, the same as it was before apart from the fact that the new agency will now take over the responsibilities previously operated by the Department. If my understanding is correct then landings on oil rigs or at small airports are covered by the regulations previously operated by the Department but which from now on would be operated by the new agency. It is quite clear.

Mr. N. Treacy

I may be of assistance to my two Clare colleagues in saying that the Spanish Point aerodrome holds a licence from the Irish Air Navigation Services Office.

Mr. Howard

All I am saying is that, since we are enacting legislation, we should know that. It would be reasonable for any person to assume that it is covered. I was simply seeking guidance as to where I would look for this particular category.

Question put and agreed to.

Sections 3 to 5, inclusive, agreed to.

SECTION 6.

Question proposed: "That section 6 stand part of the Bill."

Mr. Howard

The section states that:

Every order or regulation made by the Minister or the company under this Act shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order or regulation is passed by either such House within the next subsequent 21 days on which that House has sat after the order or regulation is laid before it, the order or regulation shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.

Apart from this section and the laying of regulations before the House, I have an interest in a document in another field which is laid before the House. I seek clarification from the Minister regarding the 21 sitting days referred to in the section. A period of 21 Dáil sitting days would elapse much earlier than 21 Seanad sitting days. Will the Minister confirm that the period referred to allows for 21 Seanad sitting days to elapse?

Mr. N. Treacy

The answer is yes. A period of 21 sitting days refers to 21 parliamentary sitting days, 21 Dáil sitting days if the Seanad is not sitting, 21 sitting days if the Seanad is sitting or a total of 21 parliamentary sitting days adding the sitting days of both Houses.

Mr. Magner

Section 6 highlights what is drastically wrong with legislation in this House, which is that it is drafted in gobbledegook. People who draft it assume Members of this and the other House are expert in the way they construct and play around with the English language. The wording of this section is gobbledegook. It probably makes sense to the Minister who has a huge file to explain it to him. We must accept what we are told. It is about time that civil servants and those who draft Bills do so in a way that people can understand. Senator Howard is correct. One should not have to guess the intention behind such language or seek legal or expert opinion as to what it is. We are lay people, not experts or draftspersons. We are here on behalf of other ordinary people to make sense of the laws proposed by the Government. Every time I see gobbledygook I will bring it to somebody's attention.

Mr. Howard

I support Senator Magner's observation. We should not conclude debate on this section so easily. I am concerned with the Minister's response. We are given a separate and distinct role as a House of the Oireachtas. If I understood the Minister's reply correctly, he said the sitting days of the Seanad and the other House could be combined to give a total of 21 days.

Mr. N. Treacy

I have reread my note and am not too sure we can combine them. I may have to withdraw that statement.

Mr. Howard

The Minister can give a more considered response shortly. When we returned from the summer recess we were confronted with a number of papers, totalling around 150 or 180 pages. I was very concerned about one document which contained 181 pages. I needed professional advice on it even though I was satisfied it should be objected to or, at least, further explained. It takes time to get such advice.

If I, Senator Magner or any other Member is confined by adding Dáil days to Seanad sitting days, it will not be physically possible for me to obtain either the veterinary or legal advice which I would need on that subject. I know it is a slightly different issue but the principle is the same. If we are an independent and distinct House, as I believe the Constitution intended us to be, it is unreasonable and unacceptable that the performance of this House should be restricted by the performance or the sitting days of the other House.

Mr. N. Treacy

I will do my utmost to respond to both Senators. I was interested in the example of gobbledegook Senator Magner gave. I presume we can take it as an example rather than a definition. I can understand and identify with what Senator Magner said. However, I think he will accept that the parliamentary draftsman is a learned lawyer and that despite the fact that we may have difficulty with what is contained in the Bill, when this Bill is passed and signed by the President it becomes an Act of Parliament and a law of the land.

Mr. Magner

Which we pass.

Mr. N. Treacy

Absolutely.

Mr. Magner

Not the parliamentary draftsman.

Mr. N. Treacy

The interpretation thereof will be a matter for lawyers. I can empathise with what Senator Magner says but he will understand that the Bill has been drafted by an experienced parliamentary draftsman who is an eminent lawyer, and will be interpreted as part of the laws of the land by lawyers. Our job is to legislate. I can understand what the Senator says but——

Mr. Magner

We are not here to make lawyers wealthy.

Mr. N. Treacy

That is another problem I can understand.

Mr. Magner

It is a huge problem.

Mr. N. Treacy

To return to what Senator Howard said, section 6 is a standard provision in relation to ministerial orders. It is, basically, a safety valve where the Legislature passes laws empowering authorities, agencies or individuals on behalf of the State to effect certain decisions. However, the Legislature also holds to itself the right to have those decisions annulled by a motion in either House subsequently if it is not satisfied with the decision which has been taken. I think it is a fine thing in legislation that we empower an agency, individual or Authority to take decisions on behalf of the public, but to protect the interests of the public we put in this safety valve whereby we can annul the decisions.

While I can understand what Senator Howard said, and he made a good point, I think it should be looked at in totality, in the broadest context: a decision is taken, it is laid in the Library of the Oireachtas, it is available to the Members of both Houses, any eventuality may happen, any notice may come to somebody's attention and any Member of either House can put down a motion within 21 days. If the Dáil has not done it within its 21 days, there is nothing to stop the Seanad from doing it within its 21 days. Consequently, we are giving a broad power to the Members of the Oireachtas to effect a decision negating a decision which has already been made. However, we have put in the caveat that any decision heretofore taken cannot be invalidated; the effect will always be forward, not retrospective.

Question put and agreed to.

SECTION 7.

Question proposed: "That section 7 stand part of the Bill."

Mr. Mooney

I would be interested in a clarification of section 7 which states that the Minister may give a direction in writing to the company. There is no problem with section 7 (1) (a) (i) but could the Minister of State please explain section 7 (1) (a) (ii) which states: "to do or refrain from doing anything to which a function of the company relates specified in the direction the doing, or the refraining from the doing, of which is, in the opinion of the Minister..."?

Mr. Magner

What does that mean?

Mr. Mooney

Why could that not have been put in simpler language? Essentially the Minister may give a direction in writing to do or refrain from doing a certain thing. Why was it necessary to insert a convoluted sequence of words following that? Not being a lawyer, I fail to understand what legal definition could be implied here.

I also want to address the area of directions. It relates to "the Minister", and I assume that is the Minister with responsibility for civil aviation. When one reads through the section one finds that the Minister can direct the company in writing to give a direction in relation to a specified area and in relation to specified restrictions on the flight of aircraft in a specified area of airspace. Subsection (d) states:

whenever the Minister is satisfied that the interests of the State or the public so require... measures taken by it and the human and material resources employed by it for the purpose of safeguarding civil aviation against acts of unlawful interference,...

The inference in this section is verging on the military and it may involve an aspect of defence of national security. Is the responsibility to rest solely with the Minister or is he acting on advice from the Minister for Defence or the Government? Does the Minister give a unilateral direction and on what is his advice based? What is the thrust of this section?

Mr. N. Treacy

The Minister will have responsibility for aviation security and subsection (d) empowers him to give directions to the Authority on various matters. Those directions could be given as the result of a Government decision or on the advice of the Minister for Defence, the Minister for Justice, the Garda Commissioner or the military head of intelligence and various other such people. The Minister has responsibility and would have the Cabinet security subcommittee and other information available to him. It is a broad ranging situation.

The Minister, who would be privy to this information, would have a fundamental obligation and legal responsibility to inform the aviation authorities that certain matters needed to be done to protect the aviation system, the public using that system and the people who may be affected by those using the airways and air systems. If air traffic control towers and aviation buildings had to be protected for a reason at a particular time in a particular way, this subsection enables the Minister to give directions to that effect.

Mr. Mooney

I thank the Minister for his clarity in relation to subsection (d). I have a question on section 7 (1) (a) (ii). A great deal of specific direction is given to the new Authority under this subsection in relation to, for example, becoming members of international organisations. Is there a purpose behind the specificity of this section? Are there international organisations which the new civil aviation authority will be precluded from joining or are there organisations to which Ireland does not subscribe because of its policy on neutrality?

Mr. N. Treacy

This subsection enables the Minister to direct the company to take any action necessary to meet the Government's responsibilities as a member of an international organisation, such as the International Civil Aviation Organisation. In other words, this will enable the Minister or any of his staff representing Ireland at various international fora and being a party to international conventions and treaties, some of which will be set up in the future and which will not be enshrined in legislation or have a binding effect on the new Irish Aviation Authority, to allow the Authority fulfil his responsibilities as a member of that new organisation or any particular organisation to the satisfaction of the Minister and the Government of the day.

Mr. Mooney

Can it also be construed as preventing the Civil Aviation Authority from taking a fully autonomous role in joining international air navigation organisations? That is why I asked if there was another agenda. Was it in order to comply with the stated policy on neutrality of this Government and successive Governments because of the close association with military travel? Are these directions any different to those which are written into similar legislation establishing semi-State bodies? Is there any departure?

Mr. N. Treacy

There is no departure; they are very similar. The Senator is correct when he says the Authority will be obliged, as a national commercial State body, to carry out the policy of the Government and the people of Ireland enunciated by the Government of the day. The Authority must operate under the normal parameters of our foreign affairs policies and responsibilities.

Mr. Ross

I am grateful to Senator Mooney for asking the last question. Is this section identical to the usual legislation for semi-State bodies with regard to ministerial directions? Second, I am slightly uneasy about this part of the Bill; perhaps the Minister could tell us if there are any areas of this new aviation authority's functions which will not be subject to ministerial direction.

Mr. N. Treacy

They are very close to similar provisions in other semi-State legislation. They are not identical because, first, we are dealing with aviation and, second, the Authority will have major international responsibilities and when they are taken into consideration, the legislation we pass must be somewhat different from legislation for other semi-State bodies whose responsibilities are only national.

Mr. Ross

Are there any areas in the functioning of this body, either in the regulation or commercial aspects, which will not be subject to ministerial direction or immune from the Minister giving direction about how the body is organised and directed?

Mr. N. Treacy

Obviously the Authority must carry out the aviation policy of the State. It has a commercial mandate. It must operate under international treaties and conventions and that imposes certain obligations on its operations. In the normal ancillary activities, the Authority will make its own commercial decisions and be free from absolute ministerial control. However, it will report regularly to the Minister and consequently will be under certain ministerial control.

Mr. Ross

Would the Minister be able to give directions, for example, on safety controls and regulations down to minute detail within the parameters of international regulations?

Mr. N. Treacy

No. The Minister would not be able to give directions down to minute detail. The Authority is free from control on the matter of fees, charges, technical details and day to day aeronautical management.

Mr. Ross

Does the Minister not have power to intervene?

Mr. N. Treacy

The Minster is empowered to intervene. However, he would not give directives in the normal day to day running of the organisation, although he is empowered under our laws, the Constitution and some aspects of this legislation to intervene at any time on an issue. He can issue a directive, but in the normal commercial operation and management of the Authority the Minister would not be involved in specific detail.

Mr. Ross

If, in theory, the Minister is entitled to intervene in the most minute detail, which he obviously is, but which in practice he says he will not do, will he consider withdrawing those powers from the Bill? What is the point in having that power if the Minister will not exercise it? Such an assurance is unnecessary if the Minister will not exercise this power, keeping this provision in the Bill is unnecessary if it will not be used. All it does is raise fears about ministerial interference when we have assurances that that will not happen.

Mr. Mooney

In the context of the question I raised earlier about similarities between this and other legislation setting up semi-State bodies, it has always been the practice for Ministers with responsibility for semi-State bodies to defer or to refuse to answer questions on their day to day operation. They have always made it quite clear that the Minister has no brief in regard to questions of a specific nature in relation to the managerial function of semi-State bodies and I ask the Minister to clarify whether the same situation will apply to the Irish Aviation Authority. Although the Minister will have control over the policy aspects of the Irish Aviation Authority, will he or she be involved in the day-to-day operation of the executive and managerial functions of the body?

Mr. Daly

It would be most unwise for the Minister not to have a function in relation to the direction of the company in certain areas, for instance if the Government decided as a matter of policy that the national airline or those involved in the airline business should change their method of communication, say to a satellite communications system, which would involve considerable State investment in the national airline and in the necessary equipment, and which would involve keeping in mind all the implications for the aviation business here. It would be inconceivable that the Minister would not be in a position to give a direction along those lines to the Authority, where the Authority might feel that staying with the existing system of navigation might be more desirable from its point of view. Therefore, the power which the section gives the Minister, to give a direction in writing to the company on a matter of Government policy on major issues, for instance the example I have given, is a fundamental power and, for that reason, it is important to keep this provision.

Mr. N. Treacy

The position is exactly as Senator Mooney and Senator Daly outlined. The Minister can give directions similar to those given to other State sponsored and semi-State organisations on general policy but he is never involved in their day-to-day running. There would be no point setting up a commercial autonomous organisation if the Minister was involved in the every day running of the companies. There would be no point taking them out of the Civil Service system, away from political responsibility. The Minister's role here is on general policy. Obviously that policy would evolve from Government and from the company itself. There will have to be a constant link between the Minister, his Department — there will be a special section in the Department dealing with the Authority — and the Authority. There will be special interaction between them, a constant evolving of national aviation policy, taking into account the changes internationally so that we will not be left behind. Obviously the Minister, as a Member of the Government, will be able to give a direction on any aspect of the Authority at any time, but he will not be involved in the normal detailed running of the organisation. He will be basically a policy director.

Mr. Ross

What I am trying to get is a definite reply from the Minister of State. I hope I have got it.

Mr. N. Treacy

The Senator has.

Mr. Ross

The Minister has the power to intervene or to give a direction on anything. Is that correct?

Mr. N. Treacy

That is correct.

Mr. Ross

What the Minister of State says is that it is unusual for that power to be exercised in a matter of detail. Where is the line drawn? When does a matter of major Government policy become a matter of detail? At what level is the line drawn and the Minister says this is Government policy and beyond this he shall not go because it is a matter for the executives of the semi-State body? I am not clear about where that line is to be drawn. Why is that power necessary if it is not going to be exercised? I cannot understand why the Minister says that certain matters within the semi-State body will not be subject to ministerial decision.

Mr. N. Treacy

I would like to be of assistance to Senator Ross and to the House on this matter but we must accept that we are setting up a corporate structure. We will give it commercial teeth. It will be headed by a chief executive, a team of line managers and an administration. It will take account of the traditions in national and international aviation policy. It will be fully in tune with the policy of the Government vis-á-vis present aviation policy and with the international changes which are being effected in international aviation policy.

The Authority has an important public responsibility which it will have to exercise in close co-operation with the Minister. It has to have a commercial mandate and the line is clear. The Minister has a macro responsibility and the Authority will have the micro responsibility. In other words, it will be responsible for the day to day details but when it comes to decisions of major importance vis-á-vis Government policy, investment or opportunities, the Minister may wish to direct the Authority to take a particular line.

He will not come in each week to say that he did not like what was done the last Friday and ask that it be changed by the next Thursday. That will not arise. It will be a constant, normal, professional relationship between a Minister as a member of a Government acting on behalf of the people with a political responsibility to creating public policy, and an Authority acting on behalf of the taxpayers and the consumers it supplies and who demand its services. They will be acting in a responsible commercial way and I am confident a successful corporate structure will evolve in that way.

Mr. Magner

The underlying assumption in Senator Ross's question is that Ministers are not to be trusted. As he comes from the school of private enterprise which says the rights of the owners should always be paramount, in this case the owner is the people and the person to exercise that responsibility on behalf of the people is the Minister.

Underlying all that — as I said last week I am an avid reader of Senator Ross's column — is the fact that he is rapidly becoming a serial killer of State companies.

Mr. N. Treacy

As long as he is not becoming a serial killer of Ministers we will be all right.

Mr. Magner

Last Sunday he wrote that this baby should never be born. Why he is so concerned now with rearranging the baby's clothes is beyond me.

Acting Chairman (Mr. Sherlock)

You cannot make a remark like that in the Seanad. I must ask you to withdraw it.

Mr. Magner

I withdraw the remark.

Acting Chairman

Thank you.

Mr. Magner

If it gave any offence I withdraw it.

Mr. Ross

It did not offend me.

Mr. Magner

I would withdraw any remark that could conceivably upset Senator Ross. As regards the main point of his question, the responsibility should be automatic. If there was more ministerial interference we might not have lost £17 million in Aer Lingus Holidays.

Mr. Ross

Thank you for your protection, Sir. However, nothing Senator Magner said caused me any offence. I understand what the Minister of State said but could he give us some assurance that when he talked about the difference between the macro and the micro policy — Government policy being the macro policy and the micro policy being for the semi-State body — neither he nor any other Minister will interfere or will give a direction in regard to the detailed day to day running of this body? In other words, matters of charges, safety regulations or matters of commercial importance will be left to the semi-State body.

I am making the point that Ministers are coming from a completely different angle. Ministers from the Labour Party and the Fianna Fáil Party are coming from different angles — the decision made depends on whether it is a Labour or a Fianna Fáil Minister. They are coming at the matter from a completely different angle and will be making decisions for different reasons and motivations. Obviously in what the Minister of State calls macro policy he will certainly have those powers but would he give us an assurance that he will not interfere in the day to day running of the Authority and that he will give no directions on detail or the day to day running of this body?

Mr. N. Treacy

I am pleased with Senator Ross's acceptance that the directions in future will be given by either a Fianna Fáil or a Labour Minister. That gives me great assurance.

I could not give such a guarantee; it would be foolish of me to do so. The Minister of the day has certain responsibilities to discharge on behalf of the people and the Government. He may have to intervene in a particular situation. One section in the Bill refers to where there is a difficulty pertaining to an accident or security and the board may consult the Minister and the Minister may take the final decision. The Minister may have to take an instant decision on any particular issue an any particular day so I could not give such an assurance.

With reference to the point Senator Magner made pertaining to another semi-State organisation, last year the Government took an objective and critical view of the performance of our semi-State organisations and, acting on behalf of the Government, the Minister for Finance drew up a set of regulations and guidelines by which these semi-State bodies must discharge their obligations. Those guidelines place great responsibility on the board of each company but more particularly on the chairperson of each board who must report on specifics in a detailed way to the Minister at the end of each year. The chairperson has the facility to report at any time on any issue, as the board may also do. One can be certain that the Minister will only intervene when it is necessary to do so. He will only intervene on a matter of policy or direction and in the interests of Ireland.

Mr. Mooney

I am not totally satisfied with section 7 (1) (c) to which we referred earlier in relation to the measures taken by the board and the human and material resources employed by the board. The line about which I am concerned and which I would like clarified is: "...for the purpose of safeguarding civil aviation against acts of unlawful interference..." I am thinking of a scenario where Irish airspace could be violated by a military power. The chain of command in this legislation would seem to suggest that once the aviation Authority became aware of this unlawful interference it would have to contact the Minister for Transport, Energy and Communications who, in turn, would have to contact the Minister for Defence as this would be a defence matter. If our airspace is violated, if there is an act of unlawful interference, this is essentially a military matter. I am curious to know if the Minister has addressed the efficient chain of command that would be required in this instance. A visitation of this kind could lead to a doomsday situation. However, we are considering legislative effect and I am curious to know if the Minister has addressed the seeming anomaly in this legislation where he is taking unto himself powers which could be more efficiently carried out by the Department of Defence.

Mr. Quinn

I am returning to the point concerning the power of the Minister in regard to policy and the power of the Minister to interfere and give directions with regard to the detail.

It appears to me that we have had a success story in Ireland since the foundation of the State in establishing State companies because we have had the opportunity of giving commercial freedom to commercial companies. Errors have been made where Ministers on occasion have attempted to interfere in the detail and day to day administration and I am delighted to hear the Minister say that this is not the intention in this case. However, we are legislating not only for the Minister, or Fianna Fáil and Labour Ministers because there may be a Minister from another party at some point in the future——

Mr. N. Treacy

I would accept that.

Mr. Quinn

If our job as legislators is to establish in law the rights of a Minister, it is not sufficient for the Minister to say: "It is not the intention".

I had the interesting task ten years ago of being involved in An Bord Poist, prior to the establishment of An Post. When the legislation dealing with this new commercial body was going through the House, we were concerned that it would not be interfered with on a daily basis by a Minister at the behest, perhaps, of a Deputy who wished to have a favour done. What the Minister is saying is acceptable, but it is not what we are agreeing should be written into the legislation.

I have no problem with the reference requiring the company to comply with a policy decision. It is good to see that in writing, because that means it will have to be confirmed and it will not be simply a matter of a phone call from the Minister for something to be done.

However, if the Minister is unhappy with a detail, he has the power to dismiss the board or the chairman. That that is the second power available to the Minister should he wish to become involved in the detail and the Minister has to be very sure of himself if he undertakes this course of action. That is a powerful weapon. It is similar to what would happen to a commercial company in the private sector. If the shareholders do not like what is happening they have the power to change the board. They do not get involved in the detail, but once a year at the AGM they question and criticise and then change the board if they do not like what is being done.

I wonder if the Minister has thought this through. I was interested in the question asked earlier by Senator Magner to ascertain if this legislation is the same as that setting up other State companies. I do not believe it is the same as the Bill establishing Telecom Éireann and An Post. I believe this is much wider and gives the Minister greater freedom. I suggest that the Minister think twice before we enshrine these powers in legislation.

Acting Chairman

Before I call Senator Magner may I make an observation? There has been a lot of debate on this section but I am not restricting the Senator in making his point.

Mr. Magner

I thought you were asking me to withdraw something I had yet to say, Sir. There is a true divide on this issue. There is no direct correlation between the State, and semi-State companies and the privately owned and commercially operated sector. For example, as regards the ESB, I have no doubt that what is classified as ministerial interference was the result of representations made by a Senator or Deputy when an injustice was being committed against part of a community or an entire community, say, in some part of rural Ireland. A commercial company may ignore such representation, but the State has a responsibility to improve people's lives, and people's lives are improved by the application of services nationwide.

The other reality is that in most cases the State stepped in where private enterprise refused, where the project was too big or it did not appear to be profitable. An example would be our transport services. Years ago the transport service started off as private companies going back to Bianconi, but they got out of the transport business because they could not make money. Then the State intervened and put an infrastructure together.

If one follows Senator Ross's usual cry that projects must be totally commercial, that no other consideration must be involved and that people really do not matter, what kind of a country does one finish up with? Do not always assume that ministerial interference is bad in itself. It can be very useful in correcting injustices, and I can give 150 examples. I have no doubt that Senator Ross and Senator Quinn would have made representations to Ministers to get something done that would have come within the remit of a State company if that company was not acting with sufficient speed or dispensing what would be termed natural justice.

Therefore there should not be an assumption that there is a direct correlation between a private board of directors, who operate strictly in a commercial sense, and a semi-State company that has responsibilities to the country. As we know, private commercial companies can up anchor and head off out of this country and leave nothing behind them; they have done so but State companies or semi-State companies cannot and never will do that. They have a different set of priorities and I hope they always will have.

Acting Chairman

I call on Senator Ross. I repeat the same observation I made to Senator Magner.

Mr. Ross

I will keep my remarks to a minimum. I thank the Senator for those remarks. Commercial State bodies have been even more hampered by the fact that Senator Magner's party leader, together with the Minister for Health, made strong and binding commitments that there would be no further sale of State assets in the lifetime of this Government, something which may or may not be binding as it was a pledge made under pressure at a certain period. The problem is that we do not know where we stand at this stage. It is difficult if the Tánaiste makes a statement one day to keep Labour backbenchers happy and the next day we see——

Mr. Mooney

A Leas-Chathaoirligh, this has nothing to do with the Committee Stage of this Bill.

Mr. Ross

——State assets are up for sale. I would like to know where we stand in relation to State companies.

Mr. N. Treacy

Perhaps we could have a debate on that issue another day.

Acting Chairman

Senator Ross, confine your remarks to the section and do not make general comments.

Mr. Ross

It is a direct question to the Minister; will the Minister interfere, or will ministerial consent be necessary for changes in charges by the National Aviation Authority?

Mr. N. Treacy

The direct answer is no, and I made it clear earlier that in the matter of fees and charges, technical details to do with aviation, etc., it is a matter for the new company. It will not involve the Minister. Section 7 refers to policy of a general kind, in other words, it refers to the policy and not the detail.

This legislation is modelled on the legislation introduced to deal with An Post and Telecom Éireann. I wish to tell Senator Quinn that we appreciate his contribution to the development of An Post and to the leadership he gave as Chairman of the Board of An Post.

Section 7 (1) (a) (i) states that the Minister may give a direction in writing to the company requiring the company—

to comply with policy decisions of a general kind made by the Government in relation to aviation in so far as the decisions affect functions of the company,

and, basically, it goes into the detail after that. The reason it is broader in this legislation is that this new company will have international responsibilities and obligations.

Mr. Mooney

I talked about the chain of decision-making in the event of acts of unlawful interference, such as the violation of our airspace by military authorities or hijacking, which would probably come within the ambit of the Department of Justice because it would be seen as a criminal act. If a military violation took place it would come within the ambit of the Department of Defence. Yet the chain of command suggests it is a matter for the Authority to deal with, in conjunction with the Minister for Transport, Energy and Communications and, perhaps, another Minister. The chain of command needs to be addressed more efficiently. I await the Minister's reply.

Mr. N. Treacy

I must specify that we are taking about civil, not military aviation. It is unlikely — and I hope it never happens — that our airspace will be violated because we are aware of the aircraft which comes into our airspace at all times. The international world is on constant alert and we are always aware of what is happening. Planned measures work over a period of time.

In the unlikely event of a national disaster of serious proportions, to which Senator Mooney alluded, an emergency system comes into operation on a national, regional and county scale. There is a clear system in operation. Public servants around the country have a key responsibility to press the buttons in any situation on air, land or sea. This system is well known in the public sector, but it is not advertised for State security reasons. Each agency has its own responsibilities and it links into a clear system in the interest of protecting the people and anyone using our airspace or the navigation area around our coasts.

Question put and agreed to.

Section 8 agreed to.

SECTION 9.

Question proposed: "That section 9 stand part of the Bill."

Mr. Mooney

What expenses will be incurred by the Minister in the execution of this Bill?

Mr. N. Treacy

The Minister will be obliged to appoint staff in his Department to act as a link between the Government and the public with regard to aviation policies and to ensure that regulations in relation to State policy are implemented internationally, nationally or otherwise. Existing Civil Service staff will be transferred to the new Irish Aviation Authority and remuneration of the staff who will be carrying out these functions must be paid from the Revenue account of the Exchequer.

Mr. Mooney

Will this section become redundant when the new Authority comes into being or will it be an ongoing charge on the Exchequer? Can the Minister quantify the figures if it is an ongoing charge?

Mr. N. Treacy

It would not be possible to quantify the figures. There is a major charge on the Exchequer as a result of civil servants who are ANSO staff because they must be paid by the State from Exchequer funds. There will be a major reduction in this figure from 1 January when this Bill is passed and signed into law and the new Authority comes into being. As a result, a commercial body will be responsible for discharging its obligations to its staff by way of salaries, etc. The remaining staff will have specific responsibility for ensuring that this Bill is fully enacted and that the aviation policy is carried out on behalf of the people. Since the remaining staff will be permanent in the Department of Transport, Energy and Communications, their salaries and administration expenses must always be paid by the Exchequer.

Question put and agreed to.

Section 10 agreed to.

SECTION 11.

Mr. Howard

I move amendment No. 1:

In page 13, between lines 41 and 42, to insert the following subsection:

"(3) The headquarters of the company shall be located at, or close to, Shannon Airport, County Clare.".

This amendment should not come as a surprise to the Minister or to the Government. A similar amendment was tabled by Deputy O'Malley during a debate of a select committee of the other House. It was debated and rejected by the Government. I invited the Minister, during my Second Stage contribution, to give an assurance that he would incorporate in the legislation a requirement to locate the head office of the Irish Aviation Authority at Shannon or close to Shannon. I did that deliberately because its location would be valuable and significant to the area, given current events in the region.

I am anxious that the head office should be located in Shannon. I invited the Minister to include in the legislation a requirement that it should be located there for no other reason than for the benefit of the area. If the Minister had acceded to my request it would not have been a contentious issue and it would have gone through without difficulty. The Government was given adequate notice about this matter during the discussion of the select committee of the other House. I told the Minister my wish during the Second Stage debate. The Minister responded to the debate but he did not deal with my request. That reluctance on the part of the Minister suggests that the Government is rejecting the idea of locating the head office at Shannon.

There are valid reasons Shannon is the ideal location for the head office of the Irish Aviation Authority. First, more than half the staff employed by the Authority work and reside in the Shannon region. In fact, the service provided at Shannon and Ballygirreen is the hub of an area of control which covers the west, the north and the Atlantic. As a result, this should be the location for the head office. Senator Daly, in his Second Stage speech, disagreed with my suggestion and the Minister confirmed his acceptance of Senator Daly's disagreement. Senator Daly made the point that the location of a head office is never included in legislation. Again, the Minister agreed.

Senator Mooney echoed my sentiments about the research facilities available to us. As a Member of this House I did not have anyone available to me whom I could ask to research legislation of the last ten years to check if an Act contained provision for the location of a head office in a particular place. Senator Mooney largely agreed with my point about the absence of research facilities.

When the Shannon Estuarial Authority legislation was introduced in this House Limerick was designated as the head office for that proposed body. I vividly recall its designation because there was a further requirement that the chairman of the proposed Authority should live within 50 miles of the head office. There was a lengthy debate on how the miles were to be measured. If the distance was 50 miles as the crow flies, he could be from Tubbercurry, County Sligo, but if it was miles by road the then chairman of Clare County Council, Mr. Seán Keating, from Kilbaha could not be chairman of the body.

Therefore, it is wrong to say no legislation contained a provision to designate a place for the head office of an authority or body. Also during my time here another place was designated as the head office for Údarás na Gaeltachta. Therefore, the response to this amendment should not be that this is never put into legislation because those two cases are examples in which it was done. If I had the research facilities for which I voted and which people on the other side of the House voted two weeks ago to deny me I would have several other examples to justify my argument.

It is necessary to designate and put into law that Shannon should be the headquarters of the Irish Aviation Authority because of the economy of that area. It may be said that although it may not be in the legislation the Minister or the Government will influence the decision and that the board of the Authority will look favourably on the proposal to locate the head office in Shannon. The experience with semi-State bodies in the Shannon area, particularly with Aer Lingus, is one of constant withdrawal. As one who lived in that area I have been conscious of that withdrawal through the 1950s up to today.

The philosophy behind the withdrawal is encapsulated in an air service provided from Dublin to Shannon each evening at 10.20 p.m. I have often used that service. I would alight from the aeroplane and would only have reached the car park when it would have taken off to return to Dublin empty because the crew would not remain in Shannon. That is one example of why Aer Lingus is in trouble.

The attitude has always been to withdraw from the area. I am satisfied there is a grave risk that, unless we enshrine it in legislation, an excuse will be found by the board and senior executives of this body to locate in Dublin and further staff will be withdrawn from Shannon over a lengthy period. I therefore propose that the head office of the Authority is located at Shannon Airport. I have advanced my reasons; there are others, perhaps contentious ones, I could also advance. Shannon is the natural location and will, for the foreseeable future, be the hub of the operations of this body. It is logical to locate it there. Because of the experience with other semi-State bodies in the area it is necessary to enshrine this in legislation.

Mr. Magner

I accept Senator Howard's bona fides in putting down this amendment and there is a case for siting this Authority in Shannon. There is, however, a general point which would give comfort to my old friend, Senator Ross. It is an abuse of State and semi-State companies if one does not use objective criteria in an issue as important as the site of the headquarters. I could suggest Cork as the location because it has an airport, needs the jobs and has some of the staff needed. I would also get a few lines in The Cork Examiner and I would have done my good deed for the day. However, it would bear no relationship to the needs of the company. Therefore, we do a disservice to those organisations we are trying to modernise and make relevant by ensuring they are sited in a specific area, irrespective of their needs. I would object if, given the Minister introducing the Bill is Deputy Treacy, the headquarters were located in Galway.

Objective criteria should be used to take a specific action. There was a long discussion and it was agreed the new aviation body should be commercial, make money and not be subvented by the State. As the Minister said, it should make a profit if possible. One should begin by ensuring that its structures, head office and facilities are geared to enabling it to carry out that mandate. One does not do that by resolution, no more than the Minister was told he should not interfere in the day to day business of the new Authority.

We should meet the executives of the aviation Authority, examine the objectives we are trying to achieve and then decide where we should site it. The likelihood is that the decision will be in favour of Shannon, it has always been the hub of our aviation business. Dublin Airport and the capital in general are crowded and Shannon has been associated with aviation since its inception. However, one does not proceed by resolution, by enshrining in the Bill where it should be established.

Senator Howard says it has been done before. If so it was for similarly crazy political reasons. It is never justified. The new Authority should decide where it should be situated because it is in the best position to do so.

Mrs. Taylor-Quinn

I support Senator Howard's amendment calling on the Minister to locate the headquarters of the Authority at Shannon Airport. I listened with interest to Senator Magner's comments about objective criteria. That is becoming a much used phrase in the modern world. We seem to be confusing modernisation and centralisation. The Senator referred to making bodies more modern and upmarket. Is he suggesting that if something is in the west it is antediluvian?

Mr. Magner

I said the opposite.

Mrs. Taylor-Quinn

One wonders if he is equating modernisation with centralisation.

Mr. Magner

I said the opposite.

Acting Chairman

Senator Taylor-Quinn, without interruption.

Mrs. Taylor-Quinn

I cannot accept Senator Magner's argument against incorporating Senator Howard's amendment in the Bill. It is important that it is incorporated and my colleague made a strong case for doing so. There are precedents. It must be recognised that at this stage the people in County Clare and the mid-west region will not accept any Minister's statement or promise. We have had enough promises concerning Shannon. Just 12 months ago Deputy Máire Geoghegan-Quinn, as Minister for Transport and Communications, came to County Clare and made a very strong statement that she and her Government — many of the current Ministers were Ministers in that Government — would maintain the status of Shannon. She gave a firm commitment and her reasons to do that. Yet less than 12 months later the picture changed. We in the region will not accept promises from Ministers. This commitment to establish the headquarters of the Authority at Shannon Airport must be incorporated in the legislation and enshrined in this Bill.

As Senator Howard said, we have clear and definite reasons for wanting it there. Over 300 employees of the current ANSO operate from Ballygirreen, just outside Shannon Airport. The majority of the operation's workforce are based there. There is huge potential for further development in that area which controls a large area of airspace, out across the Atlantic and up along the north coast. It is a clear area from which they can operate effectively.

It is imperative that the headquarters be located at Shannon Airport. We have had commitments from the Government which have not been honoured. Not alone has the transatlantic status of Shannon been removed but in an unprecedented and underhand fashion discussions were initiated with the United States authorities in relation to transferring part of the customs pre-clearance service at Shannon to Dublin Airport. There has been clear diminution of the Shannon region. We need a firm commitment from the Department of Transport, Energy and Communications that this will not continue. We need something of substance put into legislation. Commitments and statements from Ministers are not acceptable to the people in the region; we want it in the Bill.

Ms O'Sullivan

I concur with the sentiments expressed by Senator Howard and Senator Taylor-Quinn. I would also like to see the headquarters of the Irish Aviation Authority located at Shannon Airport. However, Senator Magner strongly put the case I wished to put forward. I do not think putting this into the Bill is the proper way to go. The location of any company is not a matter for legislation. Senator Howard said that he was strongly recommending this suggestion to the Minister. I strongly recommend it also but it is not appropriate that it should be enshrined in the legislation. It would not necessarily be in the best interests of the country if that method was used. While I concur with the sentiments, writing into legislation that the headquarters of the Authority should be located in a specific area is not the right way to go about achieving it.

Mr. N. Treacy

I listened with interest to this debate in the Dáil and here now. I have looked at the legislation in this area and I accept what Senator Howard says in relation to the Shannon Estuary Authority. I am sure he would be the first to admit that since we were talking about an Authority for a particular region, there was no place where those headquarters could be located other than that region. If we look at the legislation establishing Údarás na Gaeltachta, the decision was that the headquarters would be located in the Gaeltacht. It was specific to make sure that it was located in a Gaeltacht area in order that services would be given to the people of the Gaeltacht from headquarters within the area.

Here we are talking about the headquarters of a national Authority with international responsibilities. I have to concur with what Senator Magner and others have said. There is no point setting up an Authority unless it is given certain freedom and flexibility in line with Government policy to take a decision on what is in the company's best interests. I indicated clearly in this House, and in the other House, that it is not practice in legislation to identify or specify where the headquarters of a semi-State body should be located. The criteria must be what location would best enable the Authority to operate effectively. I assure the House that this decision will be given the most careful consideration and all the relevant circumstances will be taken into account.

I cannot accept that the location of the headquarters, wherever that should be, should be written into the Bill. I would love to be able to say to the House that it will go to Shannon. My duty, as a legislator with political responsibility for the affairs of ANSO, is to have a Bill passed and once it has become law, to operate the decisions that have been taken as a result of the Bill's passage.

I must make sure that a chief executive, a board, headquarters and funding are provided so that the company can go forward with a commercial mandate to discharge its obligations. We will take everything into consideration as soon as the Bill is passed. A proper, evaluated conclusive decision will be taken and, ultimately, that is the way it has happened in other legislation. It is in the interests of this House and of legislators that we would never specify where a national authority is to locate its headquarters. That should be a matter for clear evaluation and objective decision once all the information is fully and finally available.

Mr. Howard

I am not impressed by the Minister's fancy footwork. Last week he was very clear that the designation of an area for any headquarters was never in legislation. Now, because from personal experience I could inform the House that there were two pieces of legislation which designated a location for a head office, there is a mad scramble to find justification for that. Nonetheless, we have moved from the position a week ago where it was never done in legislation to an admission today that it has been done in legislation, but there were certain reasons for it.

The Minister said he would be delighted if he could announce that the headquarters would be located in Shannon. I accept that and I know he would, and there are very good reasons he should be delighted to be in a position to do that. However, the fact that he is not in a position to do it indicates that it will not be located there.

Two other factors were taken into account by the Minister in his reply. One was that it is a national body with international obligations. That is a further indication that we have to think nationally and of international obligations and locating that body's head office at Shannon would be a diminution of our obligations in these fields. This is further confirmation that the decision has already been made not to locate it at Shannon.

As I said we have moved from a situation where it was never done to write into legislation the location of a head office to a position where it was done but there were special circumstances. If I were a younger Member of the House without experience of these two pieces of legislation, I would not be able to say that. As there has to be a change and because very little notice was given, feeble excuses are trotted out as to why we cannot repeat in this legislation what was used in two other Bills and I am sure there are several others.

The fact that the Minister cannot announce the location of the headquarters of the Authority today means, in my view, that it will not be at Shannon. That is obvious because of particular party political considerations, of which the Minister is very aware, affecting his own party within the county. Therefore I have no option but to stay with my proposal.

Mr. Neville

I support the amendment. I ask the Minister to reconsider his decision on this matter and to look at the concerns of people in Shannon. Jobs have been lost due to the change in Government policy towards the Shannon stopover. There is the potential loss of a further 2,000 jobs in the region and people will be transferred to Dublin as the skills will be required there——

Mr. Cassidy

Wild allegations.

Mr. Neville

——because of the expansion due to the change in status. Those with the skills are currently in the Shannon region and when they move, the area will be denuded of these good people. If the Minister accepts the amendment it will be an indication that the Government has not sold out the area altogether and that it is anxious to undo some of the damage caused by its decision to change Shannon's status. I ask the Minister to take this opportunity to indicate to the mid-west that the decision he takes here will show that the Government support the development of the area around Shannon——

Mr. Cassidy

We totally support that.

Mr. Neville

——but now it can give practical expression to that support by accepting this amendment.

Mr. Magner

We are now moving from an amendment calling for the headquarters of the Irish Aviation Authority to be located at Shannon to the pure and unbridled party political statements — gloves off. In this sense, if one accepts the logic of Senator Howard's position, as re-echoed by Senator Neville, that they know the headquarters will not be located in Shannon — how do they know? Senator Howard knows it will not be established in Shannon because the Minister would not say it would. If that is his position, the amendment is a charade.

There is sufficient goodwill and enough common sense in locating that facility in the region. Most of those that would be involved in the new Authority reside and work there anyway, but it should be a matter for the new Authority. I do not know of any double agenda here. If Senator Howard has any evidence of the decision already being taken, I would like to hear it because I would not like to take part in a charade. Senator Howard should withdraw the amendment. There are Members on this side of the House — Senators O'Sullivan, Daly and others — who want to see this facility in Shannon. I am from Cork and I would not object to seeing the facility there, if that is what the Authority decides. It seems to make sense to me, but I am no expert.

It might show a new sign of maturity because this amendment, if pushed, will be defeated. Senator Howard has created a sufficient amount of goodwill and has made a case good enough to be substantiated. If Senator Howard withdrew his amendment, Members of all parties would lobby the new Authority — this is legitimate — to get a result. I am sure he would get all-party support to ensure that what is proposed in his amendment becomes a reality.

Mr. Daly

When we debated Second Stage of this Bill I anticipated that this amendment would be put down by Senator Howard because he would like to avail of the opportunity to embarrass Members from the mid-west who would be seen as having voted against Shannon in some way. However, those in the mid-west are wise enough to see this amendment for what it is. I said the last day that if that amendment was put down by Senator Howard, I would vote against it, and that is still my position. I notice that only his name is on the amendment. It was obvious he did not get agreement with his colleagues in Fine Gael because——

Mr. Neville

For years the procedure in this House has been that one name goes down on a Committee Stage amendment.

(Interruptions.)

Acting Chairman

I ask the Senator to confine his remarks to the amendment and not to be provocative.

Mr. Daly

I think it is fair to point that out.

Mr. Neville

That is always the procedure on Committee Stage. Senator Howard is representing us.

Mrs. Taylor-Quinn

Stop talking rubbish.

Mr. Daly

I would like to hear the views of Senator Manning and the other Fine Gael Members who totally disagree with that point of view.

Mrs. Taylor-Quinn

They may, but they will vote as the Fine Gael Members in the Dáil voted.

Acting Chairman

I ask you to speak to the amendment, Senator. You are being provocative and I ask that there be no further interruptions.

Mr. Daly

There was widespread disappointment in the mid-west at the decision to change the status of Shannon Airport but there is now an increasing realisation there — in Clare in particular — that the decision has been taken and we have to go on from here. I support the view put forward by some public representatives — not of my persuasion — in the mid-west, who said on local radio today that it was time to have a unified approach to seek additional developments for the Shannon area which would compensate the region for any loss that may arise because of the change in the flight patterns.

There is a widespread feeling in Shannon that the headquarters of the new aviation Authority should be located there. There are justifiable reasons for that. The new Authority will have approximately 600 personnel and 300 of them are already engaged in the vicinity of Shannon, between the air navigation station at Ballygirreen and the airport control tower itself. It would, therefore, be logical for the headquarters of the Authority to be located in the area where the most personnel are at present employed.

I ask the Minister to give the House some indication of the breakdown of the personnel between the various locations and to give us some indication of what the headquarters would mean if it were to be established at Dublin, Shannon, Cork or elsewhere. It is my understanding that the headquarters and staff would consist of a small number of personnel — I do not know how many. Perhaps the Minister could tell us as to the numbers involved in the headquarters management structure as distinct from the various elements of the Authority which make up the overall staff.

While recognising he cannot write it into legislation, I urge the Minister to give his support to Shannon as the headquarters for this new Authority. This would give the region an opportunity not only to make a worthwhile contribution to the air navigation business but to look at new areas of development, especially in the Eurocontrol area and in satellite communication — I highlighted this before — and ask whether the Authority would become involved in many other areas of activity which could be based at Shannon.

Mr. Howard

I am a little confused by Senator Daly's contribution. There are three aspects about which I am not clear. First, he did not have the benefit of being here for the discussion up to now——

Mr. Daly

I have a television set in my office. I heard everything that was said — I was away for five minutes.

Mr. Mooney

On a point of information, it is not in order for one Senator to refer to another Senator in this way.

Acting Chairman

This is the third time you have spoken to your own amendment, Senator Howard, and remarks from one Senator are drawing replies from another. You are entitled to do that but you must confine yourself to the amendment.

Mr. Howard

Thank you, Sir, and may I say you are most helpful.

Acting Chairman

The absence of another Member from the Chamber should not be mentioned.

Mr. Howard

I was concerned about a misunderstanding. Senator Daly is a colleague from my county and I do not want any misunderstandings to arise between us. It is not true to say that this amendment was tabled for the purpose of embarrassing somebody. People may be embarrassed, but that was not the intention.

Mr. Magner

It is called Dances with Wolves.

Mr. Howard

The Minister — I recall this for Senator Daly — was given adequate notice of the desire of my party and I to locate the headquarters of the company at Shannon. I encouraged the Minister to make that move. There would be kudos for him if he did so, and I provided him with this opportunity. I only tabled this amendment at the last minute. Senator Daly noted that only my name was put to the amendment. It was a low key effort to get a positive response from the Minister. I regret I did not receive a positive response. That is the explanation. Senator Daly said we should get together on this and that there should be a mood of optimism, but I ask him to put this in print. How does Senator Daly know what is happening in County Clare? As far as I know, he spent the weekend in Dublin attending a certain function.

Mr. N. Treacy

A successful one.

Mr. Howard

I sympathise with him because there was nobody to carry the banner for Clare around the RDS.

Acting Chairman (Mr. Belton)

You are straying.

Mr. Howard

Have a new set of regulations been issued to Members who sit in the Chair? I ask because we have been treated to a régime to which I have no objection, although it is different from what we have experienced to date. If this is the case, we must know so we can keep within the rules.

This amendment was not tabled for the purpose of embarrassing Senator Daly or anyone else. It is too bad if it caused embarrassment. The Minister was given every opportunity to respond positively. If someone is being blamed for any embarrassment which might occur, I share it equally with the Minister.

Mr. Mooney

May I throw the cat among the pigeons in relation to the absence of a specific location for the headquarters of this Authority? I am sure the Minister will respond to Senator Daly's point regarding the impact the location of the aviation Authority on a particular region. From what I could glean from Second Stage speeches and from figures being bandied about in regard to staff, etc., the secretariat of this Authority may total 50 to 60 people. The people in many areas welcome the continued decentralisation of Government bodies and if that happens in this case, many areas would welcome an injection of 50 to 60 civil servants, irrespective of the nature of the semi-State body or its functions. I raise that point in the context of the current situation.

To date all functions are carried out by executive order of the Minister, in other words, civil servants are currently based in Dublin. I am putting in the caveat that because there is an airline and an airline industry in Shannon and that 300 of the 600 staff are based there, the new Authority should be based in Shannon. I sympathise and empathise with the arguments the representatives of that region put forward. While I disagree with the principle of enshrining the location of the new body in legislation, I sympathise with Senator Howard's amendment.

Mrs. Taylor-Quinn

It is unfortunate that Government speakers have interpreted the motivation behind Senator Howard's amendment as an attempt to politically embarrass them. If they could see this amendment as genuine they would recognise Senator Howard's sincerity in this regard. Senator Howard and Members on this side of the House are concerned about the future of that region. Since the Government announced the change in the status of Shannon last week, further announcements of job losses have been made. On Saturday 50 job losses were announced in the Shannon Hotel and today more than 200 jobs losses were announced in De Beers. This is a serious matter.

Mr. Mooney

Six hundred jobs have been created in that area. I have heard of the poor mouth attitude, but this takes it to the extreme.

Mrs. Taylor-Quinn

As I said earlier, Ministers' statements are not worth the paper they are written on as far as the people in the mid-west region are concerned. We have concrete proof of that and I can provide Senators with a copy of the statement made last year by the present Minister for Justice, Deputy Geoghegan-Quinn.

It is important that the headquarters of the Authority is located in Shannon and this must be enshrined in this Bill. I do not understand Senator Daly's contribution. On the one hand, he pleaded with the Minister to locate the headquarters in the area and gave the same reasons as Senator Howard, Senator Neville and I, while on the other hand, he will vote against this when it is put to a vote. I do not understand that mentality.

In recent weeks we have heard a lot about la fourchette and this is further evidence of forked tongues. It is unfortunate that those from the region do not vote for the region. I call on Members on the other side of the House and the Minister to reconsider their position. The Minister has another opportunity to do so on Report Stage when he could table an amendment along the lines of Senator Howard's amendment. Senator Howard in his Second Stage speech told the Minister he was offering him the opportunity to table this amendment but that he would do so if the Minister did not. I invite the Minister to avail of this further opportunity.

Mr. Mooney

As someone who comes from a disadvantaged area and Senator Neville knows it, how can Senator Taylor-Quinn stand in this House and decry the loss of jobs when 600 jobs have been created in her constituency——

Mrs. Taylor-Quinn

A Minister made this announcement and people in the mid-west know that ministerial announcements are not worth the paper they are written on.

Mr. Mooney

Although Senator Taylor-Quinn's colleagues might have engendered sympathy in this House — I admire the manner in which Senator Howard put his case — it is not right for her to stand up and decry the loss of jobs in her area when 600 jobs have been created there. Go to Drumshanbo and ask them about the loss of 500 jobs. We have not had one job created in the last five years.

Mr. Magner

The Senator is being very honest. I do not know why the blood pressure has gone up because, in fairness, Senator Howard knows what he is at. He is the ringmaster in this debate and he is a ringmaster with a sense of humour. The difficulty is that he never told Senator Taylor-Quinn what he is at.

Mrs. Taylor-Quinn

He knows well what I am at.

Mr. Magner

He put this hoop up and he does not expect anybody to jump through it except his own. He knows it and we know it. It was a good move. He knows what he is at, Senator Taylor-Quinn does not. Perhaps good humour could be restored if Senator Howard explained to Senator Taylor-Quinn that he is going through the motions. If he was not he would have done what I suggested ten minutes ago — he would have withdrawn his amendment and said "Let all the people who agree where the headquarters should be sited get together and lobby the Authority". He can create a bit of history here this evening by withdrawing the amendment and putting everybody to the test. Never mind Senator Taylor-Quinn who simply wants to jump through the hoop anyway.

Mr. Neville

Last week, the Minister for Equality and Law Reform, Deputy Taylor accepted amendments from this side of the House.

Mr. Magner

Because it made sense.

Mr. Neville

Minister Taylor saw the progressiveness of this side of the House and I ask the Minister from the Fianna Fáil side to do likewise.

Mr. N. Treacy

The first thing I want to say is that I am very grateful to you and your predecessors in the Chair for the way you have tried to ensure that the Minister here would not get upset. I want to say categorically that, as far as locating the headquarters is concerned, no decision has yet been taken. This matter has not been considered. It will be considered in totality in due course when the Bill is passed. Senator Daly asked about staff. There are 600 staff involved with ANSO: 310 in the Shannon region, about 150 at Dublin Airport, 40 in Cork and 100 in headquarters in the city of Dublin.

Mr. Magner

Cork wins.

Mr. N. Treacy

If we were to locate the headquarters in the morning, 50 of these people will have to stay in Dublin. We have to take everything into consideration and that will be done. I thought I had put everything on the record in the Second Stage debate and that I had assured everybody of the position. I thought I had given the maximum information and that we would not have any difficulties. I made it clear that Ballygirreen at Shannon is the principal centre in Ireland for the control of air traffic entering or exiting from the North Atlantic air routes, and that will continue to be the case. I was the person who recently went down to Shannon to announce a £6 million investment in the most modern, sophisticated aviation technology to ensure that that would be maintained. That is our commitment to Shannon.

There has been a lot of talk of embarrassing the Government, embarrassing Fianna Fáil or embarrassing somebody else——

Mrs. Taylor-Quinn

From that side of the House.

Mr. N. Treacy

I could embarrass people very quickly. I could go back to the 1930s and talk about when Shannon was established. We know what eminent people in the Senator's party said.

Mr. Neville

Go back to the Shannon scheme.

Mr. N. Treacy

Our record is clear. We established Shannon Airport——

Mrs. Taylor-Quinn

And destroyed it.

Mr. Neville

Yes, destroyed it.

Mr. N. Treacy

——and we established Shannon Development. We negotiated emigration clearance with the United States of America.

Mrs. Taylor-Quinn

You did not. Deputy Jim Mitchell put that in place. What is the Minister talking about?

Mr. N. Treacy

We gave responsibility for tourism to Shannon Development.

Mrs. Taylor-Quinn

Until last weekend.

Mr. N. Treacy

In 1983, as a member of the Committee on Public Expenditure, when the Senator's party was in Government and her current party leader was Minister for Industry and Commerce, he was expecting us, and requesting us, to have a resolution passed to wind up the Shannon Development operation. Members of the Fianna Fáil Party, with the support of Labour representatives on that committee ensured by vote that that did not, and would not, happen. Our commitment today to the people of Shannon and to the Shannon region is as strong as ever——

Mrs. Taylor-Quinn

More rubbish.

Mr. N. Treacy

——but we must understand, and the people of Shannon must understand, that unless we have a national airline working for the people of Ireland and guaranteeing access to and for this nation, and if we do not protect it and make the decisions that affect every part of this country, including the taxpayers, then we cannot hope to survive as an island nation. We will take our decision on the location of this headquarters when we have all the information available to us.

Mrs. Taylor-Quinn

God help us. Is the Minister saying he does not have the information available yet?

Amendment put.

The Committee divided: Tá, 14; Níl, 29.

Tá

• Belton, Louis J.
• Burke, Paddy.
• Cosgrave, Liam.
• Cotter, Bill.
• Dardis, John.
• Doyle, Joe.
• Enright, Thomas W.
• Farrelly, John V.
• Honan, Cathy.
• Howard, Michael.
• Manning, Maurice.
• Neville, Daniel.
• Sherlock, Joe.
• Taylor-Quinn, Madeleine.

Níl

• Bohan, Eddie.
• Byrne, Seán.
• Cashin, Bill.
• Cassidy, Donie.
• Crowley, Brian.
• Daly, Brendan.
• Fahey, Frank.
• Farrell, Willie.
• Gallagher, Ann.
• Henry, Mary.
• Hillery, Brian.
• Kelleher, Billy.
• Kelly, Mary.
• Kiely, Dan.
• Lydon, Don.
• Magner, Pat.
• Maloney, Sean.
• Mooney, Paschal.
• Mullooly, Brian.
• Norris, David.
• O'Brien, Francis.
• O'Sullivan, Jan.
• O'Toole, Joe.
• Ormonde, Ann.
• Quinn, Feargal.
• Roche, Dick.
• Townsend, Jim.
• Wall, Jack.
• Wright, G. V.

Tellers: Tá, Senators Cosgrave and Burke; Níl, Senators Magner and Mullooly.

Amendment declared lost.

Section 11 agreed to.

SECTION 12.

Question proposed: "That section 12 stand part of the Bill."

Mr. Quinn

The name "Irish Aviation Authority" is misleading. It clearly suggests the body has more powers than it is the intention to give it. In the world of international aviation a national aviation Authority would have the right to award route approvals. This is the way the Civil Aviation Authority in Britain and its counterparts in many other countries operate. We have a horse of a different colour. I suggest what we have should be more correctly called the "Air Traffic Control Authority"; it is masquerading as a national aviation authority. I am against this, not just because it is misleading and sloppy, but because a good case has to be made for a body with the powers a national aviation authority should have. On the clause concerning the name, my point is that the name is inappropriate for what the body has been set up to do. I suggest that the Minister of State should take that into account and reconsider.

Mr. N. Treacy

I listened with interest to Senator Quinn. I do not accept he is correct in saying this would be only a traffic regulating authority. It is quite clear from the Bill and the statements which I consistently made in the debate in both Houses, that we intend this to be a commercial aviation authority.

The name of Ireland is highly regarded throughout the world and we want to give the Authority a clear identity. The Government considered a number of names for the company and decided on this one. We considered calling it the "Irish Civil Aviation Authority" but Britain has the United Kingdom Civil Aviation Authority and, in fairness to them and ourselves, we wanted to ensure there would be no confusion at international level. Consequently, we decided on the Irish Aviation Authority.

Of course, it will have traffic regulatory functions, national and international responsibility, but it will have a commercial mandate and brief. It will operate under corporate commercial criteria and will be expected to make money in ancillary activities. I am optimistic and confident for the future of this Authority and we intend to appoint a commercially driven board.

As a small island nation, route allocation must remain a matter for Government. We are in a strategic location, as I said on Second Stage, in the north Atlantic and it is important that the Government is in a position to take binding decisions, take account of the situation internationally and that our Authority is able to maximise opportunities as a result of Government decisions. I am satisfied that we are giving a clear identity from an Irish, aviation and commercial point of view to this Authority. I am happy with the name the Government has chosen and I think it will prove to have been a wise decision.

Mr. Magner

On that point, I disagree with Senator Quinn on the basis that the Irish Aviation Authority deals, in the main, with foreign airlines and companies. Therefore, it ought to contain the word "Irish". As it deals essentially with aviation matters it is essential to include the word "aviation". In dealing with international business contacts, the word "Authority" is important and understood internationally. The allocation of routes might be a possibility in the future. I do not know whether Senator Quinn is accurate in relation to what the Americans and British do, but I could see an expanding role for it in the future if this was found desirable. I think it is as good a name as possible.

Mr. Quinn

In case my point was not understood, I believe the State should decide the regulation of international air agreements. However, I believe that this new Authority should — I would like to return to this when we debate its functions — have the function to award route approval. That is the point I was trying to make. Therefore, the word is inappropriate. However, I accept the point.

Mr. N. Treacy

If we look at aviation in Ireland, particularly from an international and a service point of view, Dublin Airport on the east coast serves the British and European air traffic routes, on the north Atlantic routes we have Shannon and Knock airports on the west coast and Cork Airport on the south coast. We have a small number of international airports, compare that to the situation in Britain where there is a huge number of airports and a much greater ongoing need for the regulation of traffic routes, which would not be feasible here. However, as Senator Magner said, as the international aviation world and national aviation policy evolves, perhaps in the future we may be able to do that. However, at this stage we feel that decision should be left to the Government.

Mr. Quinn

Section 12(2) refers to the authorised share capital which it states: "shall be such an amount as may be determined from time to time by the Minister". I do not see why the amount of the share capital should not be spelled out in this Bill. I do not understand the problem with that. This is carte blanche for the capital to be any amount under the sun which is too wide.

Not only should we specify the amount of the share capital, or at least a ceiling which it should not exceed, we should also be laying down that the articles of association are so drawn up that the capital cannot be increased without reference to the Oireachtas. Otherwise, the mechanism of a State owned company becomes such that the powers of the shareholders, the State, are exercised by the Minister without any reference to the Oireachtas. There is not even a requirement that changes in the share capital be notified to the Oireachtas, let alone a requirement that the Oireachtas approve it. That is incorrect and the Minister is being given unnecessarily wide powers.

I am not suggesting that either House should get involved in the day-to-day nitty gritty detail of the workings of a State agency or Authority. On the other hand, there has to be some overview at the proper distance. The proper occasion for the exercise of that overview would be in relation to the establishment of the share capital. It should be established here what the share capital should be and that we should have a say in it and approve it.

Mr. N. Treacy

Senator Quinn made an interesting contribution. The share capital of the company has yet to be determined by the Minister for Transport, Energy and Communications in consultation with the Minister for Finance. Section 19 deals in more detail with the issue of shares and debt to the Minister for Finance. In exchange for the assets which are being transferred to the company — the current and fixed assets — consisting largely of air navigation equipment, office equipment and stores, the company will issue to the Minister for Finance shares and debt, in proportions to be determined by the Minister for Finance after consultation with the Minister for Transport, Energy and Communications. The value of the shares and debt, taken together, will be equivalent to the value of the assets being transferred. The value of the assets which are to be transferred is estimated currently at approximately £30 million.

Mr. Burke

By whom? Who estimates the value of the assets?

Mr. N. Treacy

An inventory valuation would have been done, which would be the information available in the Department.

Mr. Quinn

It is incorrect that this would not be referred to in the House. If the Oireachtas has a concern, I think it should have a say with regard to the capital. It seems to be left vacant and in the hands of the Minister, which seems incorrect.

Mr. N. Treacy

Senator Quinn is correct from a corporate, commercial point of view. However, this is a different situation where the Government has responsibility for air navigation services. The political head of the Air Navigation Services Office is the Minister for Transport, Energy and Communications. Administering on his behalf is a team of civil servants known as the Air Navigation Services Office. Until this Bill is passed by the Oireachtas, signed by the President and becomes law, it is not possible to give effect in law to what Senator Quinn says. We must first pass the law and set down the parameters within which the transfers and the structure will be put in position. When the law is passed, we will have no option but to operate within what is laid down.

While it would be positive and meritorious to proceed in the way the Senator advocated, it is not possible due to the existing structure. The political situation requires legislative decision by the Oireachtas and when the Oireachtas legislates, we are obliged, as a Government and as a Department, to carry out the will of the Oireachtas.

Mr. Quinn

I take the Minister's point. He used the word "parameters". I would like to see a parameter here in regard to a maximum share capital to which we agreed. In other words the Oireachtas should have some say.

Question put and agreed to.

SECTION 13.

Question proposed: "That section 13 stand part of the Bill."

Mr. O'Toole

Section 13 contains one of those classic phrases often included in Bills which make no sense. Why is it included and why is it necessary? To say that the memorandum of association would have to be consistent with the Act is tautology in the extreme. I do not know why that phrase is required as everything else must be approved by the Minister and the Minister for Finance. If the phrase means it is necessary to seek the approval of the Minister, that is what it should say.

I worry about providing in legislation that things have to be done within the law. It implies that there are ways in which people could act outside the law. It seems totally unnecessary to address this point and to put in a phrase to the effect that it should be consistent with the Act. Everything else in the company must be approved by the Minister for Finance and the Minister. I did not feel that was necessary either.

If the point of this section is that the memorandum of association requires the approval of the Minister and the consent of the Minister for Finance then that is what it should say and not that it should be consistent with the Act. It cannot be any way other than consistent with the Act.

Mr. N. Treacy

I agree with Senator O'Toole's remarks from a purely language point of view. However, one must look at the system as it evolves. I am responsible for this Bill and I will have an active interest in the area while I am in this position. However, others will take my place, they will not be dealing with the Act but will have responsibility for it.

The advice available to us is that this is a standard provision which we are obliged to insert. The parliamentary draftsman advised that it should be included. It clearly states that a memorandum of association shall be provided and that any subsidiary of the company shall have a memorandum of association which will have to be approved by the Minister, with the consent of the Minister for Finance.

In future if the Authority is setting up subsidiary companies, it will be brought to the attention of the Ministers for approval. It will give the Ministers an active and immediate interest in the affairs of the company and its subsidiaries. I hope it will help transparency and alertness by ensuring proper management of the Authority's affairs from a political point of view and on behalf of the people, particularly taxpayers, who will have funded the establishment of this Authority.

Mr. O'Toole

There is nothing wrong with the language. It is quite clear and I have no problem with it. The drafts-persons are to be complimented on it. I am talking about the necessity of including the phrase. Section 11 states that the Minister, after consultation with the Minister for Finance, shall cause a private company conforming to the conditions laid down in this Act to be formed and registered. That applies to the company and its subsidiaries. They can do nothing without the agreement of the Minister. In other sections, it is necessary to act within the policy approved by the Minister. They cannot move without his agreement.

I am just drawing attention to the fact that I agree with the Minister. This phrase is included simply because it is always included in legislation. However, I equally make the point that it is unnecessary. I do not think it is required to be there but I am not opposing it.

Mr. N. Treacy

We are obliged to be advised by a lawyer who discharges a very important function for us as legislators; the advice is that it is necessary to include it.

Question put and agreed to.

SECTION 14.

Question proposed: "That section 14 stand part of the Bill."

Mr. Howard

Section 14 deals with the objects of the company. The object detailed in paragraph (a) is to give effect to the Annexes of the Chicago Convention specified in the Schedule except in so far as they relate to the making of agreements within the State and other states.

Paragraph (h) states that one of the objects of the company is to regulate for the purposes of paragraph (a) the registration, airworthiness, operation and maintenance of aircraft and — this is where I have the problem — the competence of persons engaged or associated with design, manufacture, maintenance and repairs of aircraft.

We will shortly discuss the personnel who will constitute the board of the company. I do not want to anticipate what the Minister may say but I will be inquiring as to the criteria he will apply in their selection. If the board is to have responsibility to regulate the competence of persons engaged or associated with the design, manufacture and so on of aircraft, we are talking of people who reside in the United States, South America, Japan and other countries. Is the Minister seriously suggesting that the board can exercise authority over the competence of the designers and manufacturers of aircraft in countries outside our jurisdiction? Am I misinterpreting the provision?

Mr. N. Treacy

The position is clear. Obviously if we pass laws here, they can only operate within the territory of Ireland. If we accept international treaties and they are binding on us, they are administered here as if they were Irish law and we operate within the parameters which they lay down.

The Authority will have the legal power and competence to ensure that people involved in the design, manufacture, maintenance, repair and modification of aircraft and the supply of parts and materials for aircraft in Ireland are up to recognised international standards. Under no circumstances can planes be either manufactured, serviced, repaired or passed for flying unless they have clearance from the Irish Aviation Authority while they operate in Ireland.

Mr. Howard

I have no problem with the maintenance, repair and modification of aircraft or parts and materials for aircraft. However, is the Minister seriously suggesting that we are on the threshold of designing and manufacturing aircraft in this country?

Mr. Magner

I also looked at this section and I was travelling down the same road as Senator Howard. One must examine it more closely. We have regulations for almost every form of transport, regardless of whether we manufacture or design them. We do not manufacture or design motor cars but we have specific regulations governing them. I do not know of any place where locomotive engines are manufactured but we use and regulate them.

I assume that this section is to give effect to international standards. It enables us to regulate a plane in Irish airspace or airports just as we regulate emissions from motor cars which we do not manufacture here. We must always retain the right to set or implement international standards of safety and control. I presume that is the rationale behind the section. If not, there is an aircraft industry working away somewhere about which nobody told us.

Mr. Quinn

I wish to deal with a wider issue. This section deals with the functions of the new Authority. When discussing the name I mentioned that we sometimes describe functions which are too narrow. In other areas, such as capital, we have given functions that are far too wide.

The Bill represents an easy way out. There is a large technical section at the Department of Transport, Energy and Communications concerned with air navigation and related matters and to parcel those functions together and put them under this new Authority must have seemed the obvious thing to do. However, although it may have been obvious and easy, I do not think it was right. These functions, which are being retained by the Department, are referred to as the economic aspects of aviation policy. This gets back to my point with regard to the name. One aspect of that policy, which should properly stay with the Department, is the negotiation of international air agreements with foreign countries. That is the right of a Government Department and the Minister. I do not suggest otherwise.

However, what is not properly a right of the Government Department or a Minister is the approval or rejection of applications by airlines to operate on routes in and out of the country. It should be a normal commercial enterprise. This important function probably should be carried out by an independent State agency operating at arm's length from the Government. It should have a measure of independence or at least of separation from Government and it should do its business in a visible way open to examination. That is the reason for a civil aviation authority in most other countries which adjudicates on these applications. We need such a body here. That is why I had a problem with the name because the Authority does not have that right.

Why do we need it? The main reason is that the Department of Transport, Energy and Communications, by virtue of its responsibilities, cannot be independent of some of the interests involved. It is responsible for our national carrier, Aer Lingus. To put it crudely, Aer Lingus is the Department's client and it is part of the Department's job to look after Aer Lingus. I have no problem with that and it usually does a very good job. There are occasions, however, when it does not, if it did perhaps Aer Lingus would not be in its present trouble. Looking after Aer Lingus is one thing, adjudicating on route applications from the viewpoint of Aer Lingus is another matter. The national interest may well, in some cases, be different from the narrow interests of Aer Lingus. For example, if we wish to develop Shannon to its full potential we must be willing and ready to give many different airlines rights to fly in and out of Shannon. It is madness to make those decisions from the point of view of Aer Lingus especially when it is scaling down its interest in Shannon. It is a crucial point and it must be made. The powers in this section are too narrowly drawn.

Mr. N. Treacy

There is merit in what Senator Quinn says but heavy politics are also involved. It is a matter for the Government to decide what airlines should operate here and it is a matter for the Authority to regulate the system through which they fly. It is not in the interest of the Authority to be involved in deciding whether Ryanair flies into one place and Aer Lingus flies out of it. It is a matter for Government to decide what airlines can fly in from the United States, the United Kingdom or other countries, ours is a small country with a small number of international airports. The aviation Authority should regulate the system, operate on a commercial mandate in the ancillary activities and make the contribution we believe it can to commercial opportunities in the aviation area in the future.

With regard to the point made by Senator Howard, to which Senator Magner alluded, the planes which fly into the country should be — and we are satisfied that they are — obliged under international law to conform to international criteria. Obviously they are designed and manufactured elsewhere. However, in this country people, as a hobby or for other reasons, design and manufacture their own small planes and the Authority must be able to control that. There was a major project in Sligo some years ago involving various State agencies in which, as a contribution to aircraft manufacture, job creation and skills in that area, a group of young people recruited from third and second level schools manufactured a plane. It is to cover such eventualities that nobody can design, manufacture and fly an aircraft here unless they have a licence from and are under the control of the aviation authority.

Mr. Burke

The Minister answered the question I intended to ask in relation to the design and manufacture of airplanes. If a company sets up a manufacturing or design process in this country for large or small aircraft, it would automatically come under the auspices of the Irish Aviation Authority.

Mr. N. Treacy

That is correct.

Question put and agreed to.

SECTION 15.

Question proposed: "That section 15 stand part of the Bill."

Mr. Quinn

I am not clear what the section means. Does it give the Minister power to add any aviation function to those of the company or does it only give him power to add functions "connected with the functions for the time being"?

I am in two minds regarding this section. On the one hand, I want the powers to be wide; in other words, I would like this body to have the potential to become the wider body it should be. On the other, if that transformation is possible, I do not think it should be done only by ministerial order. That would allow radical change in a casual way. The right way to do this is to make a radical extension of powers subject to the approval of the two Houses of the Oireachtas. I do not mean we would have an amending Bill; an order would be enough but it would first have be debated and approved by both Houses. It is quite easy to write in such a requirement.

However, this depends on what the section means. Is the Minister's power limited to variations on the present functions or is it wider?

Mr. N. Treacy

Senator Quinn made a good point. This section gives the Minister the power to make an order assigning additional functions to the company and making any necessary provisions in relation to that assignment. This provision is intended to enable the Minister to respond to future changes in circumstances. Technological and other developments which cannot now be foreseen may, in future, make it appropriate to assign other functions to the company and this will give the Minister the power to do so without having to bring new legislation before the Oireachtas.

However, section 5 (7) provides that an order cannot be made under this section unless the draft of it has been laid before both Houses of the Oireachtas and has been approved by a resolution of each House. It will, therefore, not be possible for the Minister to extend the remit of the Authority without the decision being subject to full parliamentary scrutiny.

Question put and agreed to.

SECTION 16.

Question proposed: "That section 16 stand part of the Bill."

Mr. Mooney

Will the Minister clarify section 16 (c) (i) (ii) relating to the appointment of the chairman and the directors of the new company. Subsection (c) (i) states that each director (including the chairman) shall be appointed for a period of four years and shall be eligible for reappointment.

Subsection (c) (ii) states:

of the first directors, other than the chairman, 2, who shall be selected by lot at the first meeting of the directors, shall hold office for a period of 1 year, 2, who shall be selected as aforesaid, shall hold office for a period of 2 years, 2, who shall be selected as aforesaid, shall hold office for a period of 3 years and 2, who shall be selected as aforesaid, shall hold office for a period of 4 years;

I raise this to ask whether it is the norm in semi-State bodies that a director may be appointed for what could eventually end up as a one year term and whether it follows that, as the directors are drawn by lot to determine the duration of their period up to a period of four years, they are eligible for reappointment within that time?

Acting Chairman (Mr. Farrell)

You are on section 17 there, we have not passed section 16 yet.

Mr. Mooney

I am sorry. My mistake.

Mr. Howard

This is an important section of the Bill and deals with the general duty of the company. I wish to refer to certain points raised such as the duty of the company "to conduct its affairs so as to ensure that the revenues of the company are not less or are sufficient taking one year with another." It goes on to outline the charges and costs which are properly chargeable to the revenue account. It requires the company to "generate the capital that it requires and remunerate its capital and pay interest on and to repay its borrowings and to conduct its affairs at all times in a cost-effective and efficient manner." That provision is aspirational and what we would all say in relation to any company or industry or anything else in which we would be involved in establishing. However, it is important that the Minister outlines what steps are open to him to ensure that these aspirations are fulfilled. When I say that, I have particular regard to the performances of some semi-State operations in recent times. Section 16 (2) states: "Nothing in section 14 or this section shall be construed as imposing on the company, either directly or indirectly, any form of duty or liability enforceable by proceedings before any court to which it would not otherwise be subject." I have a fair idea of what this means, but for the benefit of the House it should be clarified. What steps are available to the Minister to ensure that what are simply aspirations in that measure will be the practice during the operation of the company?

Mr. Magner

I understood from the Minister's Second Stage speech that this company should find it impossible to get into debt. Its charges are regulated, as I understand it, by the international aviation body and, in turn, the Irish operation is entitled to recoup whatever expenditure it incurred in exercising the civil aviation authority within the State. Therefore, technically, and this is where I share some of the concerns expressed by Senator Ross, this company should never get into debt. Is that correct?

Mr. Quinn

I would like to ask a question on this section but it is probably similar to a previous query. Since I came into the House I look at any legislation for a new State Authority in the way I would look on it outside the House to see if it is treated in the same way. This section reflects an attitude to the place of capital in a business undertaking that is wrong. This attitude is traditional in the public service and has caused untold troubles for State companies in the past. Section 16 a (i) imposes on the company the obligation to generate from revenue the capital it requires. As a general principle that is unrealistic in business terms. This is a 100 per cent shareholder who says to the company that it is on its own where future capital requirements are concerned, that it must provide them out of its own earnings. That is all very well when companies generate some capital out of earnings, "some capital" is the point.

Many businesses, if they are to develop to their full potential, often need to go back to their shareholders or to the market for further injections of capital. The idea that that route can be fenced off for all time from the very start is totally unrealistic from a business point of view. That unrealistic attitude has caused many difficulties for State companies in the past. When that happens the State has to provide money to bail such companies out, as is happening in Aer Lingus. That is not development capital, it is survival subsidy. This would not have been necessary if a proper attitude to capitalisation had been in place from the very beginning. I am not suggesting that the State should invest capital everywhere. I am saying that if there is a proper appreciation of the place of capital in a growing business, as that business grows capital needs to be provided, either by the State as a shareholder or by the State opening up a shareholding to some other parties. The myth that companies will never need more capital or any more capital injection from outside has caused some of our State companies in the past to be run into the ground. That is really the point I am making about the assumption that no more capital will be required.

Mr. Ross

I am puzzled by this section and I am not sure whether it was included in legislation setting up other bodies of this sort. There is very little point in a section of this sort because it seems purely aspirational. Will the Minister tell me what "a general duty" means? It seems to be a phrase put into the Bill to tell the company that it ought to make money in a vaguely commercial way. Subsection (2) says that nothing can be done about it if it does not. There is no place in this Bill or in any legislation for an aspiration that a body of this sort will possibly, in various circumstances, subscribe to commercial criteria, but that if it does not nothing can be done. I do not know whether that makes it legal but it makes it totally irrelevant. The Minister is saying in this Bill that we would like the company to make money and to be able to raise the capital necessary out of its revenue, but that if it does not, we will think about doing something else.

I agree with some of what Senator Quinn says about generating capital from revenue, it seems that we will never learn the lesson that Telecom should have taught us. When Telecom was in a similar situation to which this clause addresses itself, it said it was intending to raise the necessary £225 million it needs per year in terms of capital expenditure from revenue. That is pie in the sky. It will not and cannot happen and its solution was to look for EC funds, which it did not get.

This provision appears to require that capital must be generated from the profits of this company which simply will not happen. We are talking about £60 million, the figure the Minister quoted in his speech, so the first thing we should do is to define this general duty, say whether it is just an unenforceable aspiration, and if so to delete it from the Bill. Will the Minister explain what "general duty" means, whether the words are enforceable, and how this ties in with the fact that the Minister has given the company guarantees of £80 million?

Mr. Burke

I will expand on what Senator Howard said in relation to the memorandum. It is par for the course when compared to all State-sponsored bodies. I would like to know what powers the Irish Aviation Authority will have to confiscate planes in the case of a company getting into debt.

Mr. N. Treacy

In response to Senator Ross, it is not true to say that Telecom Éireann has not got European support. In 1987 when I was appointed Minister of State at the Department of Finance one of our responsibilities was negotiating the Valoren programme and under that programme Europe supported the laying of fibreoptic cables, etc., around the country. That is one thing I remember clearly. At present we have an application in the National Development Plan for further support for Telecom Eireann. There has been European support and we are happy with the attitude the EC Commission has adopted toward the plan, particularly in the telecommunications area.

I have listened with great interest to the points made about the financial basis for the operation of the Irish Aviation Authority and in particular the question of profitability. As I indicated, the main revenue source for ANSO, as it will be for the Authority, is the Eurocontrol on-route charging system. This system operates on the basis of a three year cycle. In the first year we estimate the cost and traffic for the second year and base the unit charge on those estimates. In the third year we make whatever adjustment is necessary to ensure that the costs incurred in the second year have been properly and fully charged and collected.

The effect of this system is that if we underestimate traffic for any year the unit charge is set at too high a level and we make a surplus. We then have to make a compensating repayment to users in the following year. If we were to remove the phrase "taking one year with another" from section 16 and required the Authority to make a profit every year it would not be in a position to make this compensating repayment to the users and would, therefore, not be in a position to comply with international agreements. This is the basis of international aviation agreements and we are obliged under the ICOA convention to operate that system.

We have deliberately chosen the format of a normal commercial company for the Irish Aviation Authority for two main reasons. First, we believe the company format is best suited to providing the most effective efficient means of delivering service to the users, compatible, of course, with safety standards. Second, we believe that the company format is best suited to exploiting the commercial opportunities that exist for the provision of training and consultancy services.

The services that ANSO currently provides, that is the regulatory and operational functions, are public utilities. In general we expect and demand that public utilities operate efficiently and effectively. However, we expect that where public utilities — the ESB is a perfect example of this — have a surplus that that surplus is ploughed back into the business either to make it more efficient or to reduce the cost to the customers. Similarly with ANSO and the IAA, any profit ANSO makes on its core business must be ploughed back into reducing costs to the users.

Over the past few years ANSO has strategically structured its finances so that it would do a little better than break even. In 1992 there was a modest profit of £1.7 million on its operations. Similarly, the projections we have made for the Authority indicate there will be a modest annual surplus amounting to £2 million. ANSO has adopted the strategy of aiming for a small annual surplus or profit on its core functions. To budget for a strictly break-even situation could result in a temporary loss — and I stress temporary — which would oblige the Exchequer or the Authority to finance that loss. If ANSO or the Authority incurs losses on its core business they can be recovered from the users through higher charges in the following years. The vast majority of ANSO and, in the future, Authority users are foreign airlines.

Despite the fact that losses can be recovered we take the view that the Exchequer should not have to be temporarily burdened with such losses. Hence our determination to plan and budget for annual surpluses. Once the Authority becomes operational it will be active in the market for specialist consultancy and training services. These activities which are outside its core business will have to be fully viable on a purely commercial basis. There is no question of the Authority entering into substantial speculative investment funded or supported by the taxpayer. These would have to stand or fall on normal commercial criteria.

We do not foresee the need for substantial investment in the Authority's consultancy and training work. Mostly what the Authority will be selling is the skill and expertise of its staff. Profits made in these activities will be used to fund dividend payments to the Minister for Finance and to further expand the employment potential of these activities.

The capital base which we propose, and I have made this clear in some of the debates, is £30 million by way of transfer of State assets to the new Authority. That will be funded by equity of £15 million on the State's side and a borrowing or debt of £15 million on the Authority's side. In return for the capital base — the assets — the Authority will return £15 million to the Minister for Finance. Operating on the basis that it is getting these assets and will operate under normal commercial criteria with the normal funding that any commercial company would have, the Authority is expected to perform. To see that it performs up to the commercial criteria there will be a chairman and a board of directors and a special unit in the Department of Transport, Energy and Communications working in close co-operation with the Authority to ensure that the regulations and the parameters laid down are implemented. The State, the Government and the various Ministers will be endorsing the efforts of the company to expand its operations and we are already making arrangements that this should be the position between now and the establishment of the Authority and once the Authority is established.

In direct response to Senator Burke's point about confiscating planes in a default situation where planes would not be paying their route charges, there would be a facility in co-operation with Eurocontrol whereby confiscation could be arranged. There is a mechanism in the Eurocontrol system and in the international convention where that could be done. It would be the extreme case as most airlines meet their obligations. We have to take into account a situation where, if there was an international crisis, like the Gulf War, air traffic activity could be reduced immeasurably and could have a detrimental effect on the Authority's finances. There is an allowance for that situation in the Bill.

Mr. Ross

I would like to return to the point about the "general duty". I do not know what that is or what it means. Perhaps I could put it in another way. What will happen to the company or what measures would be taken by the Government if the company fails in this general duty?

Mr. N. Treacy

We start with a positive attitude. We have confidence in the new Authority based on the track record of ANSO as an agency of State within a Government Department. This is a monopoly, as was mentioned on Second Stage. It will be giving a regulatory service in a lucrative area. The exigencies on it, the commercial criteria and the commercial profitability that the company will have, are regulated internationally. If we overcharge for Irish air routes people will divert from us so the company has a fundamental duty to maximise traffic opportunities, enticing them into our airspace and to get a reasonable price for going through that airspace. That is the basic thrust of the company's initial policy.

There will be a general duty laid down in that the conditions are there for commercial State-sponsored bodies. The Government has reviewed that situation over the past year. On his appointment the chairman will be given specific instructions and documents and he will be obliged to operate to those criteria. The board will be made fully aware of that at their first meeting, the chief executive will be fully aware of that from when he is appointed and the management and staff of the company will be fully aware of that situation. It is expected that the 600 staff who have a track record as dedicated civil servants will be fully aware of the demands and their responsibilities, the responsibility and the policy of Government and that they will carry them out. In the event that that is not done the Government will take a serious view. The board will be questioned and may have to be changed. Drastic action would have to be taken but we are confident that we will not find ourselves in that situation. We have to be prepared for every eventuality. We are confident that we have totally committed experts and if they get a good board with a commercial mandate we believe they will succeed.

Mr. Ross

The Minister did not answer my question. I presume he is saying the general duty is unenforceable, that in the event of the failure of the board or the company — as the Bill describes it — the only option is for the Minister to change the board. Is that correct?

Mr. N. Treacy

I presume the Senator is correct. If we appoint a board with a management in position and a staff on duty and if at the end of the year the company fails to return a profit, then we would have to take account of that situation. However, that would be normal commercial analysis and it is not expected that each year the company may be able to return a profit. The international aviation situation regulates itself and there are surpluses and deficits, and based on clear commercial operating systems, the company should be able to trade forward and successfully. If we were not satisfied that a genuine effort was made to make a commercial success of the company, then the Government would have to take a serious view of this.

The normal laws of the country are enforceable against staff, the directors and so on, but there is no law or no action we could take against any individual if they were not able to return a profit. If that is what the Senator means that is not possible.

Mr. Magner

On that point I have a certain sympathy with the views expressed by Senator Ross and the remarks made by Senator Quinn regarding generating one's own capital. Bord na Móna made some good and bad decisions——

Mr. N. Treacy

Bad seasons and good seasons.

Mr. Magner

No. It was in the ancillary businesses where Bord na Móna went wrong — for example, investment abroad. The Government were made aware of the situation, but after the event. A similar situation arose with Aer Lingus. After the event is no good. I believe we can have commercial semi-State bodies without keeping the owners in the dark. The owner in this case is the State and I do no know what the unit within the Department — in any Department — was doing if it could not at least monitor the wisdom or otherwise of investments, how they were progressing and how they came about. I see nothing that would detract from the commerciality of a project with the unit of the owner looking at how these commercial decisions are made. At present the supervision comes after the mistake and it comes too late.

That should be the function of whatever unit the Minister puts in place to oversee this body, not the technical side but the investment side. The Minister mentioned that their ancillary activities will be the selling on of skills. We know from experience that companies which were set up and given a commercial mandate where we assumed they were simply selling on skills, were also selling other things and investing in companies abroad and it all went wrong. I believe we must be extremely careful in that area. If the Minister's unit within the Department has any function, its main one should be to watch the money.

Mr. Burke

Are any safeguards inserted to protect the taxpayer in case this company could return a huge loss, or is the taxpayer to bear the brunt of this, as we have seen in Aer Lingus?

Mr. N. Treacy

We do not anticipate that the risks in this company are anything of the magnitude of other companies that may have been established. On the core business side, we are talking of providing a regulatory service for international and national air traffic. On ancillary activities, we are talking about professional expertise by way of training and consultancy services to given by the company and the investment there would be in staff and technology. We do not see the company going into high risk areas in unknown commercial fields which would not be within its remit. We are confident that with the record Ireland has, with the respect there is for that record and with the tremendous expertise in ANSO, the services which this company will provide can be sold on and that, apart from the normal commercial risks faced by any corporate entity which has to operate in an international climate, we do not anticipate that we are going to be in a major risk situation.

Mr. Ross

God bless the Minister's confidence, but I suspect that every time a body of this sort has been introduced in this House every one of the Minister's predecessors said exactly the same; indeed, it would be extraordinary if they told this House they expected the relevant company to make a loss. I remind the Minister that companies which can make profits can make losses, and that appears to be something which, unfortunately, is not considered a possibility for this company at this stage. I am aware that this company is a monopoly which gives it an advantage, but it will be competing in the international arena and it may face difficulties in the future.

However, considering that the Minister is so confident of the company making a profit, he might advise the House what dividend policy is anticipated as being applicable for this company. As we have seen, because of its huge debt, Telecom Éireann will not pay a dividend to the Government next year, despite the fact that it is reporting nominal profits.

I am confused about Government policy regarding dividends. The Minister rarely demands, and no Minister in this Government has had the luxury of demanding many dividends from State owned companies because so few of them make profits. However, as we anticipate profits from this company perhaps the Minister could tell us in what circumstances he will be demanding a dividend and in what circumstances he will be allowing the company to retain its profits. I believe I detected in his reply a contradiction in that he said profits would be ploughed back into the company and then he went on to speak of a dividend.

It would be helpful if we knew Government policy on dividends from State owned companies. Perhaps the House could have guidelines regarding what circumstances and under what profit figures the Minister would expect this company to declare a profit and in what circumstances it would be better for the company to retain its money. In other words, say the company did borrow £80 million — a facility the Minister is kindly giving it — and then reported small profits, what would the Minister's attitude be to a dividend? Could the House have an outline before we see any final figures, of what the Government's dividend policy is in relation to this company?

Mr. N. Treacy

I do not believe I said I expected the company always to make a profit. I said that given the exigencies, sometimes there would be a profit and sometimes there might be a slight loss. That is the nature of the business in which the company will be operating. What we would expect is that the company should make a profit within reason, that it would discharge its taxation liability, that it would pay a reasonable or modest dividend to the Minister for Finance which would be agreed between the Minister and the Minister for Transport, Energy and Communications after due consultation, and then the company would be able to plough back into its business the remaining profits. In other words, if there was an international contract in the offing and if the Authority was able to show, in the interests of Ireland and of employment, that we could provide services which required a certain capital investment, either in staff or technology, we would expect that the Authority would get a breathing space from the Minister for Finance of the day to ensure that it could make the investments from its profits for that type of opportunity.

That is the way we would expect to proceed. As regards a new company which had to operate under Civil Service conditions, and which must operate in the future under international conditions, and which at present must operate under both sets of conditions, we cannot say at this stage that it must produce a certain dividend. We must give it breathing space and let it create its own commercial track record. Certain parameters and conditions are laid down. Everyone involved will be aware of the requirements to perform commercially and successfully. However, they must be allowed to make their own decisions.

Progress reported; Committee to sit again.